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post #1 of 28 (permalink) Old 02-13-2017, 02:57 PM Thread Starter
 
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Battery Assurance Plus Information

There appear to be a lot of questions about the numbers around the Battery Assurance Plus Program ("BAP"). I have it and I am reading straight from the lease agreement transfer document I signed. I have also had several discussions with the folks at MB Finance (who "owns" the program and the leases). By the way, they are GREAT people and are very friendly and helpful!

Here are a couple of points about the program:
* You don't pay the $80 (plus taxes) "for as long as you own the car" as someone suggested. "Someone" pays for 10 years UNLESS someone chooses to "buy out" the program. That "someone" is the collective stream of owners including the original owner/leasee.
* The car new is $5k less if you opt for Battery Assurance. You (as a used car buyer) "get" some of the savings because the car is - or should be - less expensive than a car without BAP. 5 grand less on a newer one.
*Edmunds, KBB, and the rest of the pricing folks do not have an "option" for BAP. Their values are based on RECENT SALES - BAP or not. The pricing services have not caught up with this, even though the cars with BAP have been available for years. So, their prices are meaningless for these cars. Look around and do your best. You should pay substantially less for a car covered by BAP.
* For the first 5 years you can buy out the BAP for $5010.
* A new battery DOES NOT cost $5k at the parts counter. More like $11k by some accounts ($20k by other accounts) plus install - but not $5k. MB Finance "values the battery ownership at $5k" initially - only for the sake of this program and their "math". An actual battery purchase will cost MUCH more.
* Every month after the initial 5 years has elapsed, the "buy out" price decreases 1.6% per month. At the end of 10 years, the buy out is $200.
* The monthly $80 + tax is a LEASE PLUS MAINTENANCE. Many people don't understand that the payment is for BOTH. You should not do the "math" using $80 and say the "battery is not worth it" or "the deal stinks" by ignoring the fact that you get 2 things for that price bundled together - and both have a value associated with them.
* You are guaranteed to have 80% battery capacity for up to 10 years (provided you keep paying). Since there is no data about what these particular batteries will actually DO in 10 years, some folks like the assurance/insurance.
* MB Finance can repo the battery legally whether you signed anything or not. Not sure if/how that may be done. No data yet, only anecdotes and rumors. The lease gives them the right to use "self help". IT people will recognize this as it is in some software licenses. In essence, they can "reach out and touch you" electronically if you do not pay and they can disable the vehicle any way they can... legally.
* When you buy the car used, you can "assume/transfer" the remaining lease or buy out the lease. If you choose to keep up BAP (and all payments are current) MB Finance "transfers" the remaining lease/maintenance to you. If there are overdue/late payments, you may be required to pay these FIRST, and then they will transfer the rest to you. MB Finance can, however, refuse to do a transfer on a delinquent lease. Although I would imagine they would rather get a paying customer and get the account current. One of the posters on another thread heard that MB Finance will give dealers 4 months “grace” on the payments. So if the dealer has it for 4 months or less then you likely would not get stuck with those overdue payments. I have not confirmed this with anyone at MB Finance. But this whole discussion is another good reason to do your research (get the VIN and call them before you buy!!).

My 2013, bought 2 months ago, has 7 years left to pay. The dealer bought it at an auction, paid the payment (or was forgiven by MB Finance) for the 4 months they had it, and completely "forgot" to mention anything about it. When I pressed them on the sale price they said the car “was already reduced”. They were not talking about the reduction being for the BAP, they reduced the price because nobody was calling asking about the car for months. The salesguy mentioned to me that "they knew about all the paperwork with these electric cars" and did not want to sell any more of them. “Paperwork”??? HMMMMM.

I bought mine with 9000 miles on it for $5700. Where can you buy a 2013 ANYTHING in near perfect shape today with 9k miles for $5700??? Well, you can't - even with this car you have the battery payment "baggage". It is not "wiping out your savings" as some have said in other threads. You bought the car (or should have bought the car) for way less, you now make payments, AND you get up to 10 years of insurance on a very expensive battery. You can look at it this way; you are making payments for a possible NEW BATTERY in the future. These things may well go below 80% capacity with normal usage (15k miles/year) before year 10. The early numbers SUGGEST 1.5% - 2% annual losses. Who knows if that will or will not remain constant or if it is the “norm”. Most stuff does not get "better with age".

These dealers who try to "look the other way" past this program (or simply are ignorant) and sign the "normal" paperwork are likely committing fraud. They (and you) sign documents saying they have clear title to the vehicle with NO LIENS WHATSOEVER. That ain't true if the car has BAP. It may not be long before one of these dealers gets sued and the rest will get "religion". If someone gets a battery repossessed somehow and can show the paperwork the dealer signed, that might be pretty compelling evidence that the DEALER is the rightful target for collection.

I was quite hesitant about buying my "lease return" vehicle UNTIL I discovered it had BAP. Imagine paying $5700 and then getting socked with a huge $11k or more (plus installation) charge for a bad battery!! I will wind up paying about $6,720 over 7 years. Add in the initial $5700 and I will pay $12,400. HOWEVER, this includes 7 years of battery insurance. However you split the $80 between payment and maintenance it still looks like a good deal to me. At a 50/50% split in the $80, I will have paid about $9k for the car and another $3,360 for 7 years(!) of insurance (on an $11k or more battery). Again, for me, this is a good deal.

You "mileage" may vary,
Mike
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post #2 of 28 (permalink) Old 02-13-2017, 03:28 PM
 
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Quote:
Originally Posted by mwspera View Post
There appear to be a lot of questions about the numbers around the Battery Assurance Plus Program ("BAP"). I have it and I am reading straight from the lease agreement transfer document I signed. I have also had several discussions with the folks at MB Finance (who "owns" the program and the leases). By the way, they are GREAT people and are very friendly and helpful!

Here are a couple of points about the program:
* You don't pay the $80 (plus taxes) "for as long as you own the car" as someone suggested. "Someone" pays for 10 years UNLESS someone chooses to "buy out" the program. That "someone" is the collective stream of owners including the original owner/leasee.
* The car new is $5k less if you opt for Battery Assurance. You (as a used car buyer) "get" some of the savings because the car is - or should be - less expensive than a car without BAP. 5 grand less on a newer one.
*Edmunds, KBB, and the rest of the pricing folks do not have an "option" for BAP. Their values are based on RECENT SALES - BAP or not. The pricing services have not caught up with this, even though the cars with BAP have been available for years. So, their prices are meaningless for these cars. Look around and do your best. You should pay substantially less for a car covered by BAP.
* For the first 5 years you can buy out the BAP for $5010.
* A new battery DOES NOT cost $5k at the parts counter. More like $11k by some accounts ($20k by other accounts) plus install - but not $5k. MB Finance "values the battery ownership at $5k" initially - only for the sake of this program and their "math". An actual battery purchase will cost MUCH more.
* Every month after the initial 5 years has elapsed, the "buy out" price decreases 1.6% per month. At the end of 10 years, the buy out is $200.
* The monthly $80 + tax is a LEASE PLUS MAINTENANCE. Many people don't understand that the payment is for BOTH. You should not do the "math" using $80 and say the "battery is not worth it" or "the deal stinks" by ignoring the fact that you get 2 things for that price bundled together - and both have a value associated with them.
* You are guaranteed to have 80% battery capacity for up to 10 years (provided you keep paying). Since there is no data about what these particular batteries will actually DO in 10 years, some folks like the assurance/insurance.
* MB Finance can repo the battery legally whether you signed anything or not. Not sure if/how that may be done. No data yet, only anecdotes and rumors. The lease gives them the right to use "self help". IT people will recognize this as it is in some software licenses. In essence, they can "reach out and touch you" electronically if you do not pay and they can disable the vehicle any way they can... legally.
* When you buy the car used, you can "assume/transfer" the remaining lease or buy out the lease. If you choose to keep up BAP (and all payments are current) MB Finance "transfers" the remaining lease/maintenance to you. If there are overdue/late payments, you may be required to pay these FIRST, and then they will transfer the rest to you. MB Finance can, however, refuse to do a transfer on a delinquent lease. Although I would imagine they would rather get a paying customer and get the account current. One of the posters on another thread heard that MB Finance will give dealers 4 months “grace” on the payments. So if the dealer has it for 4 months or less then you likely would not get stuck with those overdue payments. I have not confirmed this with anyone at MB Finance. But this whole discussion is another good reason to do your research (get the VIN and call them before you buy!!).

My 2013, bought 2 months ago, has 7 years left to pay. The dealer bought it at an auction, paid the payment (or was forgiven by MB Finance) for the 4 months they had it, and completely "forgot" to mention anything about it. When I pressed them on the sale price they said the car “was already reduced”. They were not talking about the reduction being for the BAP, they reduced the price because nobody was calling asking about the car for months. The salesguy mentioned to me that "they knew about all the paperwork with these electric cars" and did not want to sell any more of them. “Paperwork”??? HMMMMM.

I bought mine with 9000 miles on it for $5700. Where can you buy a 2013 ANYTHING in near perfect shape today with 9k miles for $5700??? Well, you can't - even with this car you have the battery payment "baggage". It is not "wiping out your savings" as some have said in other threads. You bought the car (or should have bought the car) for way less, you now make payments, AND you get up to 10 years of insurance on a very expensive battery. You can look at it this way; you are making payments for a possible NEW BATTERY in the future. These things may well go below 80% capacity with normal usage (15k miles/year) before year 10. The early numbers SUGGEST 1.5% - 2% annual losses. Who knows if that will or will not remain constant or if it is the “norm”. Most stuff does not get "better with age".

These dealers who try to "look the other way" past this program (or simply are ignorant) and sign the "normal" paperwork are likely committing fraud. They (and you) sign documents saying they have clear title to the vehicle with NO LIENS WHATSOEVER. That ain't true if the car has BAP. It may not be long before one of these dealers gets sued and the rest will get "religion". If someone gets a battery repossessed somehow and can show the paperwork the dealer signed, that might be pretty compelling evidence that the DEALER is the rightful target for collection.

I was quite hesitant about buying my "lease return" vehicle UNTIL I discovered it had BAP. Imagine paying $5700 and then getting socked with a huge $11k or more (plus installation) charge for a bad battery!! I will wind up paying about $6,720 over 7 years. Add in the initial $5700 and I will pay $12,400. HOWEVER, this includes 7 years of battery insurance. However you split the $80 between payment and maintenance it still looks like a good deal to me. At a 50/50% split in the $80, I will have paid about $9k for the car and another $3,360 for 7 years(!) of insurance (on an $11k or more battery). Again, for me, this is a good deal.

You "mileage" may vary,
Mike
Just read that Daimler will quit selling combustion engine smart cars in the US & Canada in Sep 2017 to focus on electric sales.
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post #3 of 28 (permalink) Old 02-13-2017, 03:37 PM
 
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Just read that Daimler will quit selling combustion engine smart cars in the US & Canada in Sep 2017 to focus on electric sales.
Read where????
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post #4 of 28 (permalink) Old 02-13-2017, 05:08 PM
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Originally Posted by mwspera View Post
You can look at it this way; you are making payments for a possible NEW BATTERY in the future. These things may well go below 80% capacity with normal usage (15k miles/year) before year 10. The early numbers SUGGEST 1.5% - 2% annual losses. Who knows if that will or will not remain constant or if it is the “norm”. Most stuff does not get "better with age".
Source?

The conundrum with sled + HV BAP vs owned complete is multifaceted . . .

1. What will the actual degradation be at the end of 5 years as it could be impactful on the 68 mile range especially in colder climes?

2. With falling battery prices, 7 - 8 years out $80 per month may be high side and a tough sell?

3. As none of the various vehicle evaluation data bases have a BAP Yes/No or sled only tab, how are auction houses, banks and auto dealers arriving at appropriate prices?

Unfortunately, "BAP confusion" is the norm even among M-B/smart dealers
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post #5 of 28 (permalink) Old 02-13-2017, 05:15 PM
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Thumbs down Looks like it's true....

By David Shepardson

Quote:
WASHINGTON/FRANKFURT (Reuters) - Daimler <DAIGn.DE> will stop selling combustion engine Smart cars in the United States and Canada and focus the brand on electric vehicles in the two markets, the company said late on Monday.

Dietmar Exler, head of Mercedes-Benz USA, said in a letter to dealers reviewed by Reuters that the sale of Smart cars with gasoline engines would stop when the 2017 model year ends this fall.

It is the latest sign of struggles for small cars in the United States.

"Developments within the micro-car segment present some challenges for the current smart product portfolio," Exler wrote. "A dedicated focus on the electric drive in the U.S. and Canada provides a logical step to support a sustainable, zero emissions future."


http://finance.yahoo.com/news/daimle...--finance.html
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post #6 of 28 (permalink) Old 02-13-2017, 05:18 PM
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Looks like the 2018 and later Midwest rallies will be local events.....
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post #7 of 28 (permalink) Old 02-13-2017, 05:19 PM
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Looks like the 2018 and later Midwest rallies will be local events.....
Yup, guess that's the answer when you have no plans to repair flawed gas tanks?

Daimler to focus Smart brand on electric cars in U.S., Canada | Reuters
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post #8 of 28 (permalink) Old 02-14-2017, 03:43 PM
 
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Thanks very much for those details from your paperwork and your experience with MB Finance ! It gives me more confidence that MB Finance is the agency enforcing and supporting the BAP lease than if it were Smart's sales division, which I give a 50/50 shot at existing in two years in the USA.

I think there are so few of the Smart ED's in the fleet that have actually had non-warranty battery replacements (maybe zero) that the eventual purchase price might just be unknowable. They're certainly allowed to make it artificially high to encourage compliance with the BAP program. Nissan used to quote LEAF batteries at the list price of the vehicle.

Your comments about "self help repossession" are also a good reminder that telematics are short-lived item on modern cars (my 2014 car's 2G data modem was obsoleted and shut off last month) and there's really only one place to get a Smart car serviced, so exposure to MB Finance's agents is probably inevitable.
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You bring up some great points/questions/topics.

Source of degradation figures? Unfortunately all we have are anecdotal bits. Several folks on forums like this reporting their capapcity figures from their annual tests. I am more concerned about what we don't have. That is, hundreds of 10 year old vehicles with their measured capacity data.

Falling battery prices making $80/month high? I'm not sure I see the connection. Daimler will very likely never engineer and produce (or have a subcontractor produce) a better battery for the existing fleet. Why would they? I predict that, unless battery prices fall by a huge number (50% or more) the cost to replace our batteries in our existing cars will likely be the same or higher than they are today. Likewise, no competitor would invest the huge sum necessary to design and build a battery for the limited number of smart cars that end up needing a new one. The best scenario is for one of the battery repair outfits to cobble together good cells/pouches and sell "refurbished" packs at lower than astronomical prices. Given the small fleet that may be difficult to do.

How are the auction houses, dealers, etc. arriving at values if the valuation services are flawed? Don't know. I do know the valuation services use "recent sales" for their numbers. Auction houses generally start at a minimum bid and see where it goes. Dealers may or my not be using the guides to govern their bids. Online prices for cars similar to mine are all over the map. I paid $5700 (it has BAP). I have seen prices for 2013 models with under 10k miles in excellent condition from $4999 up to $11k! Is BAP a consideration in these units for sale? Who knows?

Confusion? I agree completely. But that is the primary reason I bought this car. Somebody has to go first. If nobody buys electrics they will fade into memory because most people are too timid to take a chance on anything like this - especially when there IS so much confusion. And that is the reason we all post and debate. To help clear up the confusion.

I actually had an MB salesman ask me to look for him after my car was serviced. He has never seen one. When I suggested we go for a ride he lit up.

Thanks to everyone for participating in the electric "experiment".

Cheers,
Mike
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post #10 of 28 (permalink) Old 02-15-2017, 05:04 AM
 
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My BAP contract doesn't have this language:
Quote:
Every month after the initial 5 years has elapsed, the "buy out" price decreases 1.6% per month. At the end of 10 years, the buy out is $200.
Are there different versions of the contract? Mine only has the options to pay $5k or return the battery at the end of the lease, no matter when that happens. I only have an email from the dealer saying that after 10 years, I could keep the battery for $50. Don't think that will have much legal sway.

I'm waiting and seeing. Will find out in 6 1/2 years...
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